Chinese Investors Eye Freeport Mega Resort Project

Tuesday, 30 March 2010 00:00
News Editor

With the conclusion of a $2.5 billion loan agreement for the Baha Mar project said to be imminent last night, Tribune Business can reveal that another Chinese-led investor group is eyeing a multi-million dollar resort project for Grand Bahama, complete with potential cruise port.

Informed sources with knowledge of developments said the Cylin Group, whose principals include the daughter of the People's Republic of China's defence minister, was looking at a major tourism development on 2,000 acres of land in the Sharp Rock area.

It is understood that a major component of the Cylin Group is Beijing Construction Company, which would likely to be the project's general contractor/management supervisor.

Tribune Business has been able to uncover few precise details on the project, which are being kept a closely-guarded secret. However, it is understood that a cruise port and marina are two components of the Cylin plan, with the development proposed for land owned by the Grand Bahama Development Company (Devco) and Port Group Ltd. The latter is the Grand Bahama Port Authority's (GBPA) affiliate.

Some 1,500 of the 2,000 acres involved is said to be owned by Devco, the 50/50 joint venture between Port Group Ltd and Hutchison Whampoa. The latter, of course, is Hong Kong-based, meaning it is likely to have close relations with the Cylin Group and its principals.

The Cylin Group would be a 'replacement of sorts' for the Beka Development project that was formerly slated for eastern Grand Bahama, but was unable to attract the necessary financing and other support to bring it to fruition.

With Chinese support, especially from the Beijing government and its related entities, financing for the Cylin project - if approved - is unlikely to be a problem. The Bahamas remains an attractive destination for Chinese investment, with Beijing keen to put its excess foreign currency reserves and unemployed labour to good use, especially since this nation is located near the eastern US seaboard and has a strong Chinese presence already through Hutchison Whampoa.

Tribune Business sources said the Cylin project had been placed on the Cabinet agenda by Prime Minister Hubert Ingraham's government, but it is unknown whether any detailed discussions have ensued.

With Hutchison Whampoa's backing, the Cylin Group project is likely to gain some traction, especially with the Prime Minister and his government seeking to get Grand Bahama's economy moving once again after six years of depression.

Mr Ingraham is thought to be keen for some good news that will benefit his government in the wake of the Elizabeth by-election defeat, and Grand Bahama - a hot-bed of FNM support - is once again becoming a priority for him.

Tribune Business also understands that the proposed $100 million new cruise port for Grand Bahama, planned as a joint venture between the Government, Hutchison Whampoa and Carnival, is also back near the top of the Prime Minister and government's agenda.

As Tribune Business went to press last night, Baha Mar had called a press conference at its Sheraton Nassau Beach Resort, presumably to make a major announcement. As at 7.30pm, reporters were waiting for the appearance of key Baha Mar executives.

Tribune Business revealed yesterday how Baha Mar could finalise a $2.5 billion loan agreement with its Chinese partners for the Cable Beach redevelopment "within the next week", with the developer also moving to conclude talks with Scotiabank on its original $170 million syndicated loan.

"The negotiations are continuing, and it could happen in the next week; within a week or so," one source familiar with the situation told Tribune Business of the loan agreement.

From its own estimates, Baha Mar is expected to generate $740 million or 10 per cent of the Bahamas' per annum gross domestic product (GDP); some $880 million in spending and direct taxes into the economy during its first operational year; and $6.2 billion in government taxes over 25 years.

Some 8,500 full-time jobs would be created once Baha Mar began full operations, with the project bringing an extra 400,000 tourists to the Bahamas annually.

* The Bahamas last night confirmed it had signed its 20th Tax Information Exchange Agreement (TIEA), this time with Australia. Some 14 of its TIEAs are now with OECD member states, and seven with G-20 members.